Question

Which is the direct formula for National Income?

Options

• \[NI=C+I+G+(X-M)+(R-P)\]

• \[NI=C+I+G+(M-X)-(R-P)\]

• \[NI=C+I-G+(X+M)-(R-P)\]

• \[NI=C-I-G+(M-X)+(R+P)\]

Answer 1

The direct formula adds \(C\), \(I\), \(G\), net exports \((X-M)\), and net factor income from abroad \((R-P)\). It directly expresses National Income through expenditure components.